The Investors - Going under the sea

Dec 11 2006 By Graeme King, The Journal

This fast moving investor relies on instinct

Hotelier Mukesh Chawla is a man who appreciates the value of investment. Having built up a near £10m turnover business in fewer than 20 years, he has shown again and again the value of backing his judgment in making acquisitions.

It all started for Mr Chawla with buying a care home in 1989. Having come to the North-East some years before to work as an occupational therapist, he spotted an opportunity to be his own boss and grabbed it with both hands.

Having built up a six-strong chain of homes, he eventually sold to national operator Advantage Care in 1998, though his family still retains an interest in two homes in Northumberland.

On exiting the care business, Mr Chawla and his wife Rani entered the hotel industry, making The Grand Hotel in Hartlepool their first purchase, though they no longer own it.

They then started to look farther afield.

The second buy was a hotel serving the corporate market in Manchester, the Old Rectory in the suburb of Denton, then there was the distinctive Craiglands Hotel, high above Ilkley in West Yorkshire.

Then it was Mere Court, near Warrington in Cheshire, before the George Washington Hotel & Country Club at Washington, County Durham, in 2003.

And Mr Chawla and his Ailantus team are currently in negotiations to acquire another hotel in the North-West.

He says: "Total turnover is currently around £8m and with the acquisition of the new hotel it will be £10m."

Ailantus is also ploughing a lot of money into the George Washington, as the Chawlas look to double turnover in coming years.

They are having a 1,000-seat function room built, along with investment in a new golf clubhouse and extra food and drink outlets.

Mr Chawla says: "When we bought this place, it was under-performing. The golf course was run down, so we put in investment of £2m to improve it, and to improve the bedroom stock, and that has really helped us to increase occupancy.

"We needed new drainage and new treatment of the greens and we have invested quite heavily in new equipment.

"Golf club membership has risen considerably too. When we took over, it was down to 300, but this year we are aiming for 600. I know the potential of this course - it is a long 18 holes, par 73, and I believe it is a championship quality course, and the feedback from golfers has been very promising.

"In three years here, we have been able to totally refurbish 80 of the 103 rooms, the restaurant has been changed and upgraded and the bar has been upgraded too. We have a good general manager who takes great pride in the product, and a super greenkeeper.

"We sell a lot of food now - that has done very well for us. Every night of the week, we can be doing 200 covers. It's corporate business, weddings, leisure weekends - people wanting to go to Newcastle."

The entrepreneur recognises that his business, as well as benefiting from investment, is fortunate to be operating at a time when demand for hotel rooms in the North-East has never been greater.

As the popularity of Newcastle and Gateshead in particular have soared, so the George Washington has prospered. Mr Chawla says he provides a high quality hotel, with a golf course, within a short distance of Newcastle, Gateshead and Sunderland, while other hotels with similar facilities are much farther out in the country.

He said: "We are close to the city and in a built-up area, while Matfen and Slaley are quite far away from the city, so it's a different market for them.

"Previously the quality was not there at this hotel, but now we have established a very good rapport with local companies and the market is really good."